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Non-Tech : The Critical Investing Workshop
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To: bonnuss_in_austin who wrote (32812)9/14/2000 12:06:33 AM
From: Dr. David Gleitman  Read Replies (1) of 35685
 
Hi BIA:

Thank you for expressing your concern re: RMBS etal. For a period of time, I was dabbling in day trading, by the strict definition of the term, going in and out of stocks in seconds (or minutes) not believing the the LTB&H philosophy. Found that the compulsion to trade (if you want to call it that) created too much stress, especially if the stock decided to head "south" (no offense to those south of the Mason-Dixon Line). I started believing in the long term buy and hold and developed a philosophy of holding stock and selling covered calls against it (using a degree of margin). Problem with this strategy, as recently seen with rmbs going from 120 down to the 60's, or in the case of brcm going from 270 (or so) down to 215 in the time frame of less then 2 weeks, it makes be believe that fundamental valuation in limited and must be viewed within the context of market sentiment. Got tricked again these past couple of weeks. I started loading up a week before labor day in anticipation of a market rally. Seems as if the question of interest rates (used as an excuse by the powers that be) became a moot point. Watched as a substantial decrease on valuation occured over the past two weeks. Did some salvaging to meet a margin call. Bought back some nearly worthless calls and rolled them to the following month and also sold some JNPR (small position which was recently picked up two weeks ago). Advantage of selling JNPR is that schwab requires 80% to be paid in cash. Now that I became the sacrificial lamb to sell and juggle my options positions, the market can now start to take off.

Problem that we (read I) have is when to take money/profits off the table. Always think that there is more to be had. Now if you had any suggestions (open to all on the thread) what your philosophy is regarding taking profits.

Regards,

David
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